The law of demand states that, other things remaining the same, the higher the price of a good, the
A) smaller is the demand for the good.
B) larger is the demand for the good.
C) smaller is the quantity of the good demanded.
D) larger is the quantity of the good demanded.
C
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Refer to the above figure. Suppose the economy is in equilibrium at point A. If rational expectations exist, an increase in aggregate demand caused by an anticipated increase in the money supply will cause the economy to
A) stay at point A. B) move to point B. C) move to point C. D) move to point D.
If the Fed were to attempt to increase the money supply, it would most likely do so
A) by manipulating the discount rate. B) by manipulating the required reserve ratio. C) by altering the amount of gold held in Fort Knox. D) by engaging in open market operations.
What argument do you believe policymakers use in some states to justify exempting unprepared food from sales tax? (Hint: the income elasticity of food is less than one)
What will be an ideal response?
Persistent wage differentials between people having different skills violate the W = MRP ethic associated with the perfectly competitive market for labor
Indicate whether the statement is true or false